From: Carsten Falkenberg
Sent: August 8, 2005
Subject: File No. SR-NASD-2004-183

Carsten Falkenberg
6811 E 125th Ave
Crown Point, IN 46307

August 8, 2005

Jonathan G. Katz

Secretary, Securities and Exchange Commission Securities and Exchange Commission 100 F Street, NE Washington, DC 20549-9309

Jonathan Katz:

I am writing to you today out of concern for a proposed rule from the NASD. I am a licensed insurance professional and variable product salesperson. The principal review requirements and redundant suitability standards contained in NASD proposed Rule 2821 are unnecessary, will provide no meaningful additional protection to consumers and will adversely impact my business. I urge the SEC to disapprove the proposal.

I firmly believe that people who engage in misleading sales practices should be very aggressively prosecuted and subject to appropriate sanctions. However, proposed Rule 2821 duplicates requirements that are already in place. NASD rules already contain suitability requirements that apply to all sales of securities, including variable annuities. If regulators really want to protect consumers, appropriate enforcement of the existing suitability rule rather than adopting a new rule is the answer. I have seen in the corporate as well as private world that more rules on top of old ones do not make life better for the consumer, but only increase the costs for those we serve and for us. The "bad apples" in the industry need to be removed, but to penalize our clients and registered reps. is not a reasonable solution when there is not a serious problem.

Furthermore, the requirement for review by a principal found in the proposed rule appears to present a bias against these products. In addition, these requirements will lead to constant second guessing of my advice and recommendations (based upon less first hand information than was available to me) as well as significant increases in merit less litigation. A well documentated file on site is in my opinion a better solution.

Finally, I believe that the proposal is a "solution in search of a problem"I do not think the available data supports the NASD's claims that the level of sales problems in the variable annuity marketplace calls for the adoption of the proposed rule. The NASD has not statistically quantified the scope of the problem it is allegedly seeking to solve with the proposed rule. Furthermore, over 95% of the comments received by the NASD regarding the proposal opposed the new rule, and the NASD has not adequately responded to the concerns raised by the vast majority of commentators. For these reasons, I urge the SEC to disapprove NASD proposed Rule 2821. A world of integrity is a worthy ideal that we should strive for, but the layering of rules and more unnecessary rules only creates an environment of ill will from all parties involved. Let's be sure to inforce the guidelines and rules that are in place first, and then if it be shown that these controls do not really work, then remedy the situation. An education program for new registered reps which instills the critical need for absolutely ethical and morally upstanding behavior is always important as well. There cannot be a system that rewards unethical behavior. There should also not be a system which punishes all reps and our clients with unrealistic requirements because of a small number of persons who should not be in the business. Thank you for your consideration of my opinions. May the comments received from all areas help you come to a swift decision that truly reflects the needs of our great industry.


Carsten Falkenberg